Tuesday, September 29, 2009

A ground-level view of economic recovery

By DeWayne Wickham

WINDERMERE, Fla. — A day after leaders of the world's 20 biggest economies met in Pittsburgh to fashion a plan to hasten recovery from the global recession, Stefano Tedeschi, a recent transplant from that city, sat outside his new restaurant greeting a procession of customers.

Located in a strip mall in this western suburb of Orlando, the month-old business — Stefano's Italian Grille — might be a better gauge of how the economy is doing than the recovery plan hatched by the G-20 nations. "I see a steady flow of people going out to places, but they just don't want to spend as much," said Tedeschi. "I have 5-star dining at 3-star prices. That's our economic stimulus package."

The big news out of the Pittsburgh gathering last week is that the near collapse of world economic markets caused governments to promise better financial behavior by their countries. China, Japan and Germany, which sell far more stuff to other nations than they buy abroad, promised to try to reduce their dependence on exports. In return, the U.S. agreed to slash its trade and budget deficits, and try to persuade Americans to save more money.

These and other deals made by the G-20 nations are supposed to speed up the economic recovery — and lessen tensions between the world's dominant economies and those of emerging financial powers. But even before these measures have time to take effect, Tedeschi said he and his wife, Mary Caprino, are already seeing signs of recovery — and indications of changing consumption habits.

Middle-class customers are being lured into his restaurant, Tedeschi said, with novel promotions and good pricing.

"Mary came up with the idea for our 'Girls Gone Wine' night," he said of the promotion that drew more than 200 customers Thursday. For $20, women got unlimited wine and food, served butler style, from 8:30 p.m. until 11 p.m. Guys who came also got the same deal, the savvy restaurateur said.

His menu also lists 25 wines that each sell for $25. "People are spending again, but they want value," said Tedeschi. "I always ask customers what they think of the value they get here. Acknowledgement of the value is a big deal. When you get them to say it, they'll repeat it to others."

Of course, Tedeschi's reading of the economy falls far short of a World Bank analysis. What he says doesn't have the impact of the musings of Ben Bernanke, the Federal Reserve chairman. But Tedeschi's assessment of the economy is the kind of ground-level view of this nation's return from the brink of financial collapse that too often is missed by the news media — and too little valued by economists.

His restaurant is not part of a national chain. It isn't a regular haunt of Washington insiders, Hollywood moguls or network anchors. It's a neighborhood eatery with a posh look and attractive menu offerings that may have more of a future than the high-priced restaurants that attracted the well-to-do before the bottom fell out of the economy.

It's the middle class that will drive this nation's economic recovery. When these people start spending again — not just on big ticket items but also in neighborhood restaurants like Tedeschi's — that's when the signs of recovery will be most pronounced.

The changes the G-20 countries have committed to are macroeconomic measures that could fix what's broken with the world's economy. But it's in small businesses like Stefano's Italian Grille that the truest measure of this nation's economic well-being can be found.